Venezuela's hyperinflation slowing, says parliament

A year ago, Venezuelan President Nicolas Maduro launched a program of reforms including a 96 percent depreciation of the currency (AFP Photo/Federico PARRA)

Caracas (AFP) - Venezuela's rampant hyperinflation slowed down in July, the opposition-controlled parliament said on Thursday, calculating its figure for the last 12 months at just over 250,000 percent.

July's inflation was 33.8 percent, taking the total for the last 12 months to 265,000 percent, compared with a yearly rate of 445,500 reported by the National Assembly last month.

The legislature said this translates to an increase in prices of 1,579 percent over the last year.

Economist Asdrubal Oliveros told AFP the reduction in inflation demonstrated the government's "growing" monetary discipline.

"There's been a process of slowing down the growth of public spending and of the monetization of the deficit through the central bank," he told AFP.

"For me, that's a key factor to explain the slowing down of inflation."

Another factor is a banking reserves policy that has "provoked a fall of more than 90 percent in bank credit in real terms," added Oliveros.

That "curbs currency demand, affects consumption and affects the dynamics of companies."

A year ago, President Nicolas Maduro launched a program of reforms including a 96 percent depreciation of the currency and a promise to stop issuing money without backing, which many analysts blamed for the sky-high inflation.

The government "is spending much less than it did last year in real terms," said Oliveros.

The government claimed inflation in 2018 was 130,000 percent but parliament put that figure at 1.7 million percent.

The International Monetary Fund had predicted Venezuela's inflation would reach a mind-blowing 10 million percent this year, but recently downgraded that projection to a still staggering one million percent.

Venezuela is suffering one of the worst economic crises in its history with a quarter of its 30 million population in need of aid, according to the United Nations.

It also says almost 3.3 million people have left the country since the start of 2016.

The minimum wage is the equivalent of $3 but can barely fetch two kilograms (4.4 pounds) of meat.